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STATEMENTS BY SENATORS;Workplace Relations – 25 Nov 2015

I rise today to spend a few minutes to talk about the important issue of penalty rates. Why do I need to do this? Because, while those opposite may have changed prime ministers, they are still opposed to ensuring that workers get fair pay for working unsociable hours. Prime Minister Malcolm Turnbull is as determined as ever to slash penalty rates, under the guise of a ‘seven-day economy’. We need to remember that this is the same Malcolm Turnbull who supported the ever-dreaded Work Choices.

I have spoken previously in this place about the importance of penalty rates. Penalty rates are increased rates of pay for working excessive or unsociable hours, such as on the weekend. Life is busy, and weekends are important for Australian workers. Penalty rates compensate people for the time they miss out on with their families when they have to work on the weekend or antisocial hours. There are up to 4.5 million workers in Australia who rely on penalty rates—workers like police officers, retail workers, firefighters, paramedics, nurses, hospitality workers, workers in manufacturing, workers in tourism and many others. Penalty rates are essential for low-paid workers—to ensure they can meet their electricity bills, grocery bills and other essentials. I have to say, for all the Liberal rhetoric, we have not heard any evidence to support their claim that cutting penalty rates would lead to more employment. I have never heard anything from them regarding any credible research; I have only heard their own bias.

So strongly held is the Liberals’ view against penalty rates that the former Treasurer, Joe Hockey’s, last contribution to the parliament was to say penalty rates are unsustainable not because cutting them would lead to better employment outcomes; simply that they are ‘profit murder’, and I think that says it all.

Rather than a race to the bottom on wages, Labor believes the government should focus on jobs and economic growth through investing in skills and training, infrastructure, innovation and entrepreneurship. This government is deliberately placing enormous pressure on the Fair Work Commission to find against the interests of hardworking employees.

Australia is facing the lowest wage growth in 25 years, yet, from the second week of his prime ministership, Malcolm Turnbull and his newly appointed ministers have been talking about cutting the income of low-paid workers. On this side, we believe it is the role of the independent workplace umpire, the Fair Work Commission, to determine what penalty rates should apply based on evidence from employers and workers. We also believe that the commission should be free from the heavy-handed intervention by the Prime Minister.

There is no credible research which proves their assertion that cutting penalty rates would lead to additional jobs. John Hart, CEO Restaurant & Catering Australia, is on the record saying that, if penalty rates were cut, they would expect workers to work longer for the same pay. He said:

The other aspect of the penalty rate reform case would be 60,000 additional hours created on each Sunday/Public Holiday during which the reform applied. This, in fact, means that most staff working on an hourly rate on these days would work at least one extra hour. If this was to be the case, staff would not take home any less pay—just work additional hours.

Cutting penalty rates will just ensure that the lowest-paid workers will work more hours for the same amount of money.

The government is as determined as ever to slash penalty rates under the guise, as I said, of a seven-day economy. The idea that we now work in a 24/7 economy and therefore penalty rates are irrelevant is just not borne out by evidence. Look at the big banks, the stock market, financial institutions, courts and of course this place: we are not open on weekends. Imagine the outcry if government members were told that they had to work on weekends for no extra money in this chamber—be away from their families, not in their home base. I can imagine what would happen.

The fact is the vast majority of people work Monday to Friday. Recently, research compiled by the McKell Institute, on behalf of the Shop assistants union—the SDA—and United Voice, revealed the effects of the partial or complete abolition of penalty rates on workers. The research found that cutting penalty rates would harm business as the disposable income of workers would significantly decrease. It is estimated that abolishing penalty rates in the retail and hospitality area would cost workers in rural Australia between $370.7 million and $691.5 million annually. Rural communities would also lose between $174.6 million and $343.5 million in disposable income each year.

In Tasmania, my home state, the study estimates that a partial abolition of penalty rates in the retail and hospitality sectors would result in workers in Tasmania losing between $31.5 million and $58.7 million a year; and a loss in disposable income of between $15 million and $29.4 million a year to local economies in Tasmania—and that is just a partial abolition. A full abolition of penalty rates in the retail and hospitality sectors would result in workers in Tasmania losing between $78.9 million and $131.6 million a year; and a loss in disposable income of between $38.2 million and $64.1 million a year to local economies in Tasmania.

In southern Tasmania, in particular, workers in the electorates of Franklin and Denison are set to lose between $12.6 million and $23.5 million a year, if a partial abolition of penalty rates were to proceed. So, as you can see, the effects of changes to penalty rates will have a significant impact. I would like to thank both the SDA and United Voice, who I know do great work representing the members of their unions.

I have to ask myself as a Tasmanian senator—and there are a couple of others in the chamber—what would the impact on the Tasmanian economy be, if there was $131.6 million dollars less in Tasmanian workers’ pockets to spend in their community? Let me tell you: it would be an utter disaster.

Labor understands the concerns of small business, but a survey for the restaurant and catering industry found that 90 per cent of the businesses surveyed opened on a Sunday and, of those, more than half did so because they made a profit. I know that there are a large number of Tasmanian businesses that have come out in favour of penalty rates—Earthy Eats and Aromas Cafe, both in Launceston; Ginger Brown cafe, Shamrock Hotel, Kornet salt sugar coffee and the Brunswick Hotel, all in Hobart, support penalty rates for their workers, and I thank them for their support.

While the government is hiding behind the Productivity Commission to hide their plans to cut penalty rates, Labor is actually talking to the people that will be affected. We formed the Fair Work Taskforce so we could give people—particularly workers—an opportunity to talk about how the Abbott, and now Turnbull, government’s attacks on jobs, wages and conditions will affect them. I was really pleased to be asked by the shadow minister to be part of that task force. It has also been an opportunity for a conversation about what the government could be doing to create the high-skill jobs of the future, by investing in skills and training, infrastructure, innovation and entrepreneurship.

Over the two days of hearings in Tasmania, the Fair Work Taskforce heard from workers in aged and disability care, retail and manufacturing about the importance of penalty rates to them and their families; university academics about the impact of casualisation on their job security; and a whole range of people with concerns about what was happening in the industrial relations area.

On the subject of penalty rates, we heard from workers across a variety of industries. For most of these workers, the penalty rates component comprised about 25 per cent of their pay, but they relied on that extra pay to help them get by. The retail workers, for example, spoke to us about how their penalty rates gave them enough pay to afford luxuries for their families. The luxuries that they were referring to were not a holiday, a house extension or a big flashy car; they were actually talking about weekend sport for the kids or being able to go to the movies. One worker actually said to us that going to McDonalds for dinner from time to time was a luxury for her family—and this government wants to take that away. Another worker said she struggled to get by so much that she once had to borrow money from her 11-year-old daughter to pay her family’s internet bill.

In addition to the financial consequences of cutting penalty rates, we heard from those in the aged and disability care sector that cutting penalty rates would make it extremely difficult for them to attract skilled workers, particularly those who would cover night shifts and weekends—and we need these people.